Delaying Wind Power in the UK

In the UK, high quality wind resources lie off the western coast, remote from consumers. The UK has an ambitious wind installation programme with about AAAMW of capacity being installed every year on average.

Wind power installation depends on transmission capacity being available to take the power. The economics of wind energy are supported by a green certificate scheme called the renewable obligation.

Every MWh of wind energy is given a certificate, which is worth around €65. A year’s delay in starting delivery of 1GW of wind capacity means that:

• Renewables generators miss out on certificate revenues as high as €150M and power revenues as high as €130M.
• UK fossil fuel generators will have to emit as much as 1 million tonnes of extra CO2 at a cost of €15-€25 million in purchased emissions allowances.

The UK power sector has a target to reduce 5.5 MT of CO2 in phase I of the EU ETS and a similar, but possibly larger amount in Phase II. A 1MT shortfall represents around 20% of the target and a major gap to bridge with other measures. Learn about the EU Emissions Trading Scheme.